Market Profiles

RBC IS operates an omnibus account structure in this market.

For further information or support around accessing this market, please contact your RBC IS representative.

Euronext N.V.
Euronext N.V. is a European stock exchange with registered office in Amsterdam and other markets operated in Brussels, London, Lisbon, Dublin, Oslo and Paris. In 2018, Euronext is the largest stock exchange in continental Europe with 1,300 issuers representing a €3.8 trillion market capitalisation. Euronext operates regulated and transparent equity and derivatives markets. Its total product offering includes Equities, Exchange Traded Funds, Warrants & Certificates, Bonds, Derivatives, Commodities and Indices. Euronext also leverages its expertise in running markets by providing technology and managed services to third parties. Euronext operates regulated markets, Alternext and tge free market; in addition it offers EnterNext, which facilitates SME’s access to capital markets.

MTFs

Cboe Global Markets Inc
Cboe Europe operates Cboe Europe Equities the largest stock exchange in Europe by value traded and offers trading in more than 6,000 securities across 18 European markets, over one platform and under one rule book. Cboe Global Markets, Inc is one of the world's largest exchange holding companies, offering cutting-edge trading and investment solutions to investors around the world. Cboe offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, U.S. and European equities, exchange-traded products (ETPs), global foreign exchange (FX), and multi-asset volatility products. The trading venues include the largest options exchange in the U.S. and the largest stock exchange by value traded in Europe. In addition, the company is the second-largest stock exchange operator in the U.S. and a leading market globally for ETP trading.

Equiduct
Equiduct offers an efficient and reliable all-in-one trading platform designed to benefit both the Retail and Professional Investor. 

Equiduct's model offers retail brokers the solution to their Best Execution obligations. By utilising the fragmented liquidity across Europe, Equiduct is able to deliver the Best Price for a retail trade thanks to its premium Best Execution service PartnerEX.  
This established model has allowed Equiduct to create a product suite that offers clients the complete trading package:

• A Pan-European best execution service
• A Lit Order Book
• A European Consolidated Tape

Turquoise
Turquoise is a European multilateral trading facility majority owned by London Stock Exchange Group in partnership with the user community. With a single connection, members can trade shares, depository receipts, European rights issues and ETFs of 19 European countries with an efficient interoperable post-trade model, as well as US securities. Members include banks, brokers, specialist trading firms and retail intermediaries.

Turquoise features two orders books. Turquoise Integrated Lit Book combines simple limit and iceberg orders with Large In Scale hidden orders. Turquoise Midpoint Dark Book prioritizes orders by size and allows users to configure Minimum Execution Size; it features two distinct mechanisms, each executing at the midpoint of the Primary Market Best Bid and Offer: continuous matching and Turquoise Uncross™, an innovation that provides randomised uncrossings during the trading day, ideal for larger and less time sensitive passive orders. Turquoise Block Discovery™ is a new service matching undisclosed Block Indications that execute in Turquoise Uncross.

The Securities are divided into trading groups based on different trading procedures. The composition of these groups, determined on the basis of factors such as the particular characteristics and liquidity of the Securities, is detailed in the appendix of the trading rules published on the Euronext website. Securities within the same group are subject to the same timetable and price variation rules. Euronext announces the admission of a Financial Instrument to trading groups by means of a Notice. Securities are divided into two trading categories referred to as continuous or auction.

Trading phases for Securities which are traded continuously

Order accumulation period (Pre-opening phase) - during the order accumulation period, orders entered by Members and transmitted to the Euronext Trading Platform are automatically recorded in the central order book without giving rise to trades. The central order book and the theoretical opening price, which are calculated each time that a new order is entered into the order book, are continuously disseminated.

Opening auction - at the opening, the Euronext Trading Platform seeks to match orders for each Security (the "opening auction"). At the beginning of the price determination phase for a Security the order book is frozen momentarily (orders may not be entered into the Euronext Trading Platform, and orders already entered may not be cancelled or modified) while the matching algorithm is running.

The opening price is the last theoretical opening price calculated before matching. If a match occurs within the price thresholds authorised by Euronext, an opening price is displayed and the Members, whose orders are, in part or in full, executed, are informed by a message confirming each execution that has occurred and giving all relevant trade information. If no matching can be done at the opening, the price of the first trade occurring in the main trading session is designated as the opening price.

Main trading session - once the opening auction is completed, trading takes place continuously until the pre-closing phase. Once the price determination phase for each Security is completed, continuous trading in that Security begins and orders can be entered, maintained, modified and deleted. All unexecuted orders of the opening auction are forwarded to the main trading session. Once the opening auction is completed, the execution of orders during the main trading session is effected according to price/time priority. Each new order is immediately checked to see if it can be executed against orders on the other side of the order book; the limits of the orders sitting in the book determine the price.

Order accumulation period (Pre-closing phase) - The pre-closing phase starts after the main trading session phase. Orders entered by Members and transmitted to the Euronext Trading Platform are automatically recorded in the central order book without giving rise to trades.

Closing auction - The processes of the closing auction are the same as described for the opening auction. The closing price for Securities which are traded continuously shall be the price defined by the closing auction. If no price is issued at the closing auction, the closing price shall be the last traded price during the main trading session. In the event of no quotation during a Trading Day, the closing price is the last known traded price. This price can still be adjusted due to a corporate event.

Trading-at-last phase - During the trading-at-last phase, orders can be entered and matched at the closing price and only at that price. For Securities traded continuously, the trading-at-last phase will be available after the closing auction.

After hours trading (after the closing auction or after the trading at last phase) - A trade after the Trading Hours can be affected at a price within a price range of 1% around the closing price or, for eligible Securities included in the NextTrack Segment, the last disseminated iNAV.

Trading phases for Securities traded by auction

Order accumulation period (Call phase) - During the Euronext Trading Platform operating hours, except during auctions, orders entered by Members and transmitted to the Euronext Trading Platform are automatically recorded in the central order book without giving rise to trades.

Auction - At least once, but mostly twice a day, at times specified in the appendix for each trading group, the Euronext Trading Platform seeks to match orders for each Security in the group. If a match occurs within the price thresholds authorised by Euronext, a price is quoted. During this matching period, orders may not be entered into the Euronext Trading Platform, and orders already entered may not be cancelled or modified. After the price determination phase is concluded, the Members whose orders have been partially or fully executed are informed by a message confirming each execution that has occurred and giving all relevant trade information. The closing price for Securities traded by auction (single or double auction) shall be the price of the last auction. In the event of no quotation at the last auction, the price of the previous auction shall be the closing price for the day. In the event of no quotation during a Trading Day, the closing price is the last known traded price. This price can still be adjusted due to a corporate event.

Trading-at-last phase - During the trading-at-last phase, orders can be entered and matched at the closing price and only at that price. For Securities traded by auction the trading-at-last phase will be available immediately after each auction.

After hours trading - A trade after the Trading Hours can be affected at a price within a price range of 1% around the closing price.

Trading
All orders entered into the Euronext Trading Platform are acknowledged and assigned a sequential order number per Security. For each trade, Members receive an execution message showing the quantity traded and the execution price. In the event of partial execution, the unexecuted part of the order is shown in the execution message. In the event of cancellation of trades or orders by Euronext the Member will receive a notice. 

There is one electronic trading system: the NSC. Government bonds are traded through Euronext Brussels and MTS Belgium. All other information regarding trading is described in the ‘Trading Manual'.

Monday to Friday:

For auction traded securities orders are managed through an order book that operates continuously from 07:00 to 18:00 hours, but are matched just twice daily.

ISIN (International Securities Identification Numbering): Used

Other: Belgian code SVM (Société des Valeurs Mobilières)

Although Euronext is a single integrated organisation, all four exchanges maintain their separate exchange licences and continue to operate under four different jurisdictions. The jurisdiction under which a listing agreement is concluded (Belgian, Dutch, French or Portuguese) is relevant when reporting irregularities in trading in the securities issued by a company (in particular in the event of suspected insider trading, front running or market manipulation). 

Market participants are subject to the supervision of the regulator of the country in which they were granted their main license. The Euronext entry point, chosen by the market participant, determines the jurisdiction governing the membership agreement concluded between Euronext and the market participant.

From a regulatory point of view, Euronext Brussels is governed by the Belgian Act of August 2, 2002 and is recognised as a market undertaking according to article 16 of the Act. Euronext Brussels is responsible for the organisation of the markets and the admission, suspension and exclusion of members and has been appointed by law as a “competent authority” within the meaning of the Listing Directive meaning it is responsible for the admission, the suspension and the delisting of financial instruments on its markets.

National Bank of Belgium (NBB): central bank of Belgium, is where Belgian government debt and corporate debt are issued. It controls the market infrastructure : i.e.( the financial sector, the stock exchange, and the central depositories Euroclear Belgium for equities and National Bank of Belgium Clearing for debt instruments (by appointing their respective government commissioners) and the international central depository and Euroclear Bank. The NBB is also in charge of the application of the Financial Action Task Force on Money Laundering (FATF) rules in Belgian Financial sector.

The Financial Services and Markets Authority (FSMA): Effective January 1, 2004, the Banking and Finance Commission and the Office de Contrôle des Assurances (OCA) merged into one single entity called the Banking, Finance and Insurance Commission who is the sole entity responsible for the supervision of the financial markets in Belgium.

In October 2009, it was announced that the prudential supervision of the banks, the insurance companies and the pension funds, currently under the authority of the CBFA (Commission Bancaire, Financière et des Assurances) will be entrusted to the National Bank of Belgium. This reform and the new roles of the National Bank and the CBFA were defined in the Royal Decree issued on March 3, 2011 , and the reorganisation of the supervisory authorities has taken place on April 1, 2011.

The name of CBFA was changed into FSMA ( Financial Services and Markets Authority) to reflect the change in its mandate and , in particular, its exclusive competency for the supervision of the rules of conduct in the entire financial sector in relation to investors protection (e.g. MiFID), including Banks, Insurance Companies and Pension Funds.

In 2008 the Belgian market started an initiative of dematerialisation of all instruments eligible at Euroclear Belgium. Securities can be held in dematerialised, registered form. 

The public debt is issued in bearer form and held in dematerialised form in the X/N system at the National Bank of Belgium.

Corporate bonds are issued in a dematerialised form and some are eligible in the X/N system at the National Bank of Belgium. Some corporate bonds are physical instruments immobilised at Euroclear Belgium (generally in bearer form).

As from January 1, 2008, the Law of the suppression of bearer shares foresees as a general rule that:

• the issuance by Belgian issuers of bearer certificates is no longer possible
• the physical delivery of bearer shares is prohibited in Belgium
• the listed shares and the sicavs held in securities accounts are automatically converted in dematerialised form.

On January 1, 2014, all bearer securities still existing were automatically dematerialised and held in a securities account, provided the issuer took all necessary measures for the automatic conversion (adaptation of the By-Laws, determination of a "Top of the Pyramid"). If such measures have not been taken, the securities will be automatically converted into registered securities. For the issuers having opted for a dematerialisation into securities account, the shareholders have the right to opt or for a full dematerialised form or for a registered form in beneficiary owner name. 

On the January 1, 2015, all remaining bearer securities were converted into a counter-value deposited at the Caisse de Depôts et Consignations until the owner asks for restitution. As from January 1, 2016, the person requesting for the proceeds of the sale will be penalised with 10% per year on the proceeds or on the counter-value of the securities.

Equities: The minimum board lot is one share.

Debt: one Euro cent.

Odd lots are permitted.

In auction trading, the maximum allowed variation threshold at each fixing is 10 %. In continuous trading, static and dynamic thresholds will suspend execution of orders during in principle four minutes.

The static threshold is determined around the static reference, which is normally the previous close price at the beginning of the day and the opening price after opening. The threshold is set at 10 %.

The dynamic threshold will freeze the automated execution when a single order causes a deviation of more than 2% from the last traded price. Orders triggering a freeze will be partially executed up to the thresholds of 2% (dynamic) or 10% (static), as the case may be.

EUR

There is a very active Over The Counter (OTC) market on which settlement dates can be freely agreed between traders.

ESES only processes settlement in EUR. However, for non-EUR securities traded on-exchange, LCH.Clearnet will settle these trades in Euroclear. 

During the RTS, T2S allows to modify process and "hold and release" indicators and to cancel trades.

Partial settlement is permitted at T2S for all instruction types, with the exception of linked transactions, non-EUR settlement transactions against payment and corporate action related transactions. The default set-up is at T2S account level, using a static data indicator. The indicator ‘NPAR’ can be instructed on an individual transaction basis to ensure only full settlement of an instruction.

Partial settlement at T2S automatically cancels the transaction and replaces it with two separate instructions (one as “settled” and one as “pending”). Partial settlement is automatically activated during specific windows in the T2S settlement day schedule according to predetermined T2S logic unless one counterparty specifies otherwise.

In addition to T2S partialling functionality, on-exchange deliveries which are CCP eligible can also be partialled at the level of LCH SA.

Unmatched settlement instructions remain valid in T2S for 20 working days, after that they are automatically cancelled by T2S while matched instructions remain valid for an unlimited period of time.

In T2S, matching of instructions is mandatory and occurs as soon as the two legs are proposed in any of the Settlement cycle. The matching process is done on the mandatory matching fields, the additional ones and optional ones if populated:

Bonds
The dematerialised Belgian securities i.e. linear bonds, treasury bills, traditional government bonds, bonds d'Etat and commercial paper are settled through T2S settlement system . Bonds and T-bills are settled T+2 (while other settlement cycle can be agreed on a bilateral basis).

Settlement is confirmed by Swift MT54X on a transactional basis throughout the day on SD. Failed trades are reported by Swift MT548. Settlement is possible until 16:00, for against payment and 18.00 for free of payment.

Settlement fines

• Short transaction EUR 100
• Late instruction EUR 200
• On hold/ pre-matched EUR 100

Settlement takes place in T2S against central bank money.

Stocks traded on Euronext Brussels are settled delivery versus payment. Cash is settled via the National Bank of Belgium or another Central Bank and stock is settled via the Belgian central depository Euroclear Belgium. Non-fungible stocks are not accepted into the Euroclear Belgium system, however the number of these is limited. All Belgian securities are dematerialized. If not held at EBE, they can be held in book entry with the head of pyramid.

All markets have a T+2 rolling settlement. At the end of each day, a net balance of securities and funds in respect of all transactions during the day is calculated for the financial intermediaries, and only this balance is settled. Transfers of balances of securities are made by movements on the Euroclear Belgium's securities accounts, while payment of balances of funds, are made at the National Bank or another Central Bank.

The Clearing House of Euronext, LCH S.A., ensures reciprocity of transfers of securities and funds.

In T2S, matching of instructions is mandatory and occur as soon as the two legs are proposed in any of the Settlement cycle. The matching process is done on the mandatory matching fields, the additional ones and optional ones if populated:

Mandatory matching fields are:

Trade date 
It is always a mandatory field even for FOP transactions and, combined with additional matching fields, defines the eligibility of the underlying settlement instruction for market claims and reverse claims that will be automatically processed by T2S.

CSD of the delivering/receiving party
Participants will have to populate the place of Settlement field (PSET) in their instruction with the 11 BIC code of the CSD from which their counterparty will deliver/receive the involved securities directly or through an agent.

Settlement amount
T2S allows automatic matching between settlement instructions (DVP delivery versus payment and PFOD payment free of delivery) with different cash tolerances that are set at system level:

• EUR 2.00: trades countervalue equal or less than EUR 100,000
• EUR 25.00: trades countervalue greater than EUR 100,000

Additional matching fields:

Additional fields in T2S are non-mandatory. If quoted by one counterparty, though, they have to be populated with the same values by both parties (matching to "blank" is not allowed). Any discrepancy in the values quoted in the additional matching fields will prevent the trade from matching.

The two Additional matching fields were introduced in T2S are as follows:

Opt-out ISO transaction condition indicator 
The opt-out indicator is used to instruct the CSD whether a given transaction is eligible for the application of the corporate actions on flow (market claims, reverse market claims and transformations). Whenever this field is populated by both parties with "NOMC", the CSD will not activate the corporate actions on flow process regardless the other details of the trade.

Cum / Ex indicator
Cum/Ex can be used by trading counterparties to establish an entitlement outside of regular entitlement dates.ice agreed inl matching fields:

Optional matching fields are not mandatory and can match to "blank". However, any discrepancy in the values instructed by the two parties in these fields will prevent the trade from matching. The optional matching fields in T2S, which can be used to prevent mismatching, are listed in the below table.

Common trade reference
The two parties of a trade have to quote the same reference for a trade to match. Matching will occur even if one of the two parties leaves this field "blank.

Client of the delivering/receiving CSD participant
These are the so called "second layer matching fields", which allow automatic matching of the CSD participants' clients directly in T2S. In line with the market practice already agreed in Italy in April 2014, parties are requested to populate the relevant field with the 11 digit BIC code of their counterparty.

Securities account of the delivering/receiving party 
This is the securities account number (SAC) of the counterparty in T2S. In case this information is quoted, it becomes a matching criteria (in fact, the party T2S securities account is available in all instructions).

In addition to the above Settlement changes, T2S introduced enhanced functionalities that can be used by market participants on an optional basis.

Hold and Release
A process which provides T2S participants with the functionality to hold and release settlement instruction at any time during their lifecycle until they are settled or cancelled.

Partial Settlement 
It is a T2S process automatically activated during specific windows in the settlement day schedule. It is activated by default unless one of the 2 counterparties specifies the contrary using dedicated SWIFT field.

Priority (TO REVIEW WITH GSB AS WE WILL KEEP OUR PRIORITY RULES)
Allow parties to set two levels of priority to their settlement instructions: normal and high. T2S uses priority levels in case several settlement instructions, belonging to the same ISIN code, belonging to the same account number.

Linkage and Pooling
Enable parties to link instructions together using dedicated SWIFT field. Settlement instructions can be pooled in T2S by using a pool counter. This is a common indicator for a number of instructions that have to be settled "all or none".

Cross Border in TARGET2-Securities
TARGET2-Securities (T2S) contributes in harmonising and optimising the settlement process in Europe. Depending on where the two CSD participants involved in a trade hold their securities account there will be 3 different types of transactions in T2S:

• Intra-CSDwhen both parties hold their account with the same T2S participating CSD
• Cross-CSDwhen the delivering and receiving parties hold their account with two different T2S participating CSDs

Effective November 1, 2012, the relevant authority must be notified by investors of the short position of shares and government debt when the position reaches or falls below the levels specified in the regulation. The relevant authorities are the local Financial Supervisory Authorities (FSAs). 

More details in relation to short selling are available at FSMA website: https://www.fsma.be/en/node/7235

The short positions of shares must also be disclosed to the public by posting information on the local FSA's website when a position reaches or falls below the specified levels. 

For full information of the new regulation and reporting requirements please visit the European Securities and Markets Authority website at http://www.esma.europa.eu/.

Same-day turnarounds are possible in T2S. The receipt leg of the trade needs to be settled before the delivery to avoid fails.

LCH.Clearnet SA

LCH.Clearnet S.A. is a clearing house under French law and legally integrates the former local clearing houses of Paris, Amsterdam and Brussels and Lisbon. From a legal point of view, the clearing activities carried out in Belgium and the Netherlands and in Portugal are therefore governed by the same jurisdiction as LCH.Clearnet S.A., i.e. the French jurisdiction.

Euronext makes a clear distinction between Euronext members (trading members) and members of the Euronext clearing house, LCH.Clearnet S.A. (clearing members). A trading member can also act as a clearing member, but is not obliged to do so. Inversely, a clearing member does not have to be a trading member.

If a trading member does not act as a clearing member, it has to conclude a clearing agreement with a clearing member. This agreement is sent to the Board of Directors of LCH.Clearnet S.A., which marks its formal approval. When a trading member who does not process its own clearing executes transactions, the transactions are registered in the name and account of the clearing member.

National Bank of Belgium settles government bonds, treasury bills, commercial papers and most Corporate bonds.

Belgium has two central depositories:

Euroclear Belgium (former CIK) is an inter-professional organisation that has acted as a central depository since 1968. The Minister of Finance approved its general rules on April 4, 1969. As a public body, Euroclear Belgium is supervised by a representative of the Ministry of Finance. Euroclear Belgium is now part of Euronext Brussels and deals with all Belgian and foreign shares listed on Euronext Brussels, private bonds and traditional government bonds.

The Dutch and French CSD's have merged with Euroclear and become Euroclear Netherlands and Euroclear France respectively. On January 1, 2006, CIK SA/NV, the Belgian Central Securities Depository became part of the Euroclear Group and adopted the commercial name "Euroclear Belgium". 

The National Bank of Belgium (NBB) acts as a depository for dematerialised securitiesi.e. linear bonds, Treasury Certificates, Commercial Papers and most of new issues in corporate bonds. All settlements are processed via a system that operates on the basis of X (exempted) and N (non-exempt) accounts.

In this system the withholding tax for N accounts is immediately incorporated pro rata temporis into the transaction. Basically this system was set up to abolish registration procedures and to avoid the requirement to hold the fixed income stock for the entire coupon period. In some cases, both these conditions were necessary to qualify for gross income payment.

The use of the NBB is compulsory by law for the safekeeping of dematerialised Belgian government bonds. The use of the NBB is necessary for the safekeeping of corporate bonds and corporate money market instruments when the investor wants the X/N tax system to be applied.

Membership of the central depositories is mandatory for financial intermediaries in Belgium.

BIS is an international organisation which fosters cooperation among central banks and other agencies in pursuit of monetary and financial stability. The Committee on Payments and Market Infrastructures (CPMI) uses three common structural approaches, or models, to categorise the links between delivery and payment in a securities settlement system.

At the National Bank or another Central Bank of Belgium and Euroclear Belgium: BIS DVP Model - a system in which there is a simultaneous transfer of securities and associated funds from the buyer to the seller. All transfers occur on a trade-by-trade (gross) basis with all transfers made via book entry. All transfers are final.

Each transaction gives rise to the simultaneous settlement of one cash and one securities movement. In other words, the process checks the effective provision of cash (for the buyer) and of securities (for the seller) before settling the relevant transaction.

Securities transfers are processed in Euroclear Belgium, cash transfers are processed in the NBB or another Central Bank , with the two systems being linked in accordance with an agreement between Euroclear Belgium and the NBB or another Central Bank. The cash delivery instruction sent to the NBB or another Central Bank will only be initiated by the reservation of the securities involved in the transaction on a blocked account. The process of cash delivery cannot be initiated in the event of failure on the seller's side. The reciprocity of the cash and securities transfers is guaranteed as reserved securities are only released upon receipt of the confirmation of payment sent by the NBB or another Central Bank. In other words, the buyer is never able to use the securities on his account.

The concept of nominee registration does exist in Belgium for some instruments. In 2007 the FSMA has clarified the role of Nominee in particular for registrars and registered funds.

Book-Entry: All shares are dematerialised instruments which are eligible for book-entry deposit at Euroclear Belgium. Registered securities can only be registered under a private name. The ownership of registered securities issued by the Belgian government can only be established by an entry in the Grand Livre de la Dette Publique (Public Debt Ledger).

Physical: Non-fungible securities can be held in vaults of the custodian banks. Please refer also to dematerialisation process in Securities Form.

N/A

Registered securities are available from the issuer in one to six weeks.

Shareholdings may be required to be disclosed by the beneficial owner, particularly when holdings reach or exceed prescribed disclosure limits. Investors must ensure that they comply in full by reporting such holdings to the appropriate organisations for this market, within the timeframe required. If you have any questions regarding this issue we encourage you to consult your legal counsel. 

Failure to comply with reporting requirements may lead to penalties and/or other sanctions.

• acquisitions of 5%, or multiples thereof, of the voting rights of a Belgian company listed on an EU exchange must to be disclosed to the FSMA and the issuing company within a time period of four trading days following the date on which the investor, subject to the notification requirement, knows or should have known this fact. A drop below the 5% threshold must also be reported. This is the legal threshold.
• only shares carrying voting rights and securities that give the right to acquire existing shares carrying voting rights (so no convertible bonds or warrants that give the right to subscribe a capital increase), have to be disclosed.
• statutory thresholds allow companies are allowed to lower the disclosure threshold to 1%, 2%, 3%, 4% and 7.5%. These thresholds will have, however, to be voted by the shareholders at an Extraordinary General Meeting.
• the disclosure notification to the FSMA and the issuing company must be made within four trading days regardless of the fact the issuer is using the legal or the statutory thresholds.
• when lower thresholds are introduced by an issuer, holders of important participation who are concerned are required to disclose their holdings within 10 trading days after the publication in the by-laws of the issuing company.

The documentation to be used for the notification and all practical instructions are available on the FSMA site
 
Rules on the economic expansion
All investors must notify the regional authorities responsible for Finance and Economic Affairs of any acquisition of at least 33.3% of the shares of a Belgian company. This a specific legislation related to art 36 of the Law on the economic expansion. 
 
Takeover bids rules
All Belgian companies listed on the Stock Exchange are subject to new rules that regulate takeover bids. These are the following: any person who, either individually or in concert, holds more than 30% of the voting securities in the target company shall, by way of a mandatory bid, offer the other shareholders the possibility to dispose of their voting securities.

On the evening of the third Clearing Day following the intended Settlement Date (intended Settlement Date + 3) the selling Clearing Member to which a Net Fail belongs receives an alert from LCH SA, electronically, through its access solution. Such alert requires the Clearing Member to settle the relevant Open Position by making sufficient provision on its central securities depository, or securities settlement system account, to allow the Net Fail to be settled in the normal daily settlement process, at the latest on the evening of the fourth Clearing Day following the intended Settlement Date (intended Settlement Date + 4) otherwise LCH SA initiates the buy-in procedure for the quantity of securities necessary to settle the Net Fails.

On the evening of the fourth Clearing Day following the intended Settlement Date (intended Settlement Date + 4), the selling Clearing Member to which a Net Fail belongs and the corresponding buying Clearing Member(s) receive a confirmation that the buy-in will be initiated. LCH SA charges a flat fee to the Clearing Member to which the Net Fail belongs, even if such Clearing Member delivers the securities under Article 9.

From a fiscal point of view, lending transactions are not considered as transactions for which there is a transfer of ownership.

The National Bank of Belgium (NBB) voluntary automatic lending program for government debt has been disabled upon migration to T2S settlement system in March 2016. 

The Intervention Fund merged with the Belgian banks' and credit institutions' Deposit Guaranty Fund. The fund is held at the National Bank of Belgium.

Belgium is a full member of the Financial Action Task Force on Money Laundering (FATF), and is not on FATF's blacklist. Belgium has signed and ratified the UN Convention Against Illicit Traffic in Narcotics Drugs and Psychotropic Substances of 1988 and the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime of 1990.

The money laundering rules in Belgium are contained in Law of January 11, 1993 and amended most recently on January 12, 2004 on measures to prevent money laundering and the financing of terrorism. The Law implements the EU regulation on prevention of the use of the financial system for the purpose of money laundering and the FATF recommendations on money laundering and terrorism financing. 

The National Bank of Belgium ensures that all Belgian banks and Insurance companies comply with applicable legislation and that they have adequate business procedures, control measures and auditing systems. The Authority also ensures that banks comply with the money laundering and anti-terrorism legislation, including the Know Your Customer rules. 

According to the FATF, the system put in place by the Belgian authorities is extremely coherent and very effective, particularly in the area of laundering operations involving cash currency exchange transactions. With more legal instruments and staff resources, the enforcement agencies will be able not only to continue with their work in this sector but to make progress in the area of second and third level money laundering activities.

None

None

Capital, profits and income can be repatriated freely.

There are no FX restrictions in the Belgian market.

TARGET - For the common monetary policy in the euro area, it was necessary to enable payments to be exchanged quickly and securely between the Member States of the currency union. That was the reason for establishing TARGET (Trans-European Automated Real-time Gross Settlement Express Transfer). It comprises the gross settlement systems of the fifteen European Union Member States and the payments system of the European Central Bank (European Payments Mechanism). The existing systems underwent a minimum degree of harmonisation and were mutually linked via a common structure.

Most of the time, TARGET handles large or very large amounts, connected with the settlement of transactions on the financial markets. 

TARGET2 has replaced TARGET. TARGET2 is still a system with several platforms, however NCBs will no longer be obliged to have their own system. One shared platform will be created. The introduction of this new system should make it possible to keep costs under tighter control, make for the smooth integration of the future Member States and make it easier to take account of the increasing financial integration in the euro area and the new needs of the banking sector. Based on this, the Banca d'Italia, Banque de France and Deutsche Bundesbank are currently developing this new single shared payment platform (SSP). 

CEC - The great majority of giro payments consist of retail payments and these are processed by the CEC (Centre for Exchange and Clearing), set up back in 1974. In 2004 the CEC processed an average of 4 million payments a day, representing a daily total of over 2 billion Euro. 

The CEC is the central point for channelling transactions between the banks issuing the instructions and the banks receiving the payments. CEC participants can exchange payment instructions day and night via B2B-communication: transfers totaling up to 500,000 Euro, cheques for up to 50,000 Euro, unpaid cheques, domiciliations, unpaiddomiciliations, card payments (debit card, credit card and PROTON electronic purse) and commercial bills. In volume they represent around 99.75% of all interbank giro payments in Belgium, but only 2% in value. The other interbank payment orders are exchanged via ELLIPS (component of the European TARGET) and a marginal volume (only cheques for more than 50,000 Euro) via the Clearing House. 

Between 2008 and 2010 this national system has co-existed with the EBA STEP2 SCT Service (actual the only PE-ACH with the introduction of SEPA on January 28, 2008). The system continues to be very active.

The Clearing House - The Brussels Clearing House was set up in 1908, when bankers decided to exchange their settlement instruments and payment orders multilaterally at a central location, rather than bilaterally at one another's counters. The example set by Brussels was copied, as after a while Belgium had 40 independent clearing houses, all located in establishments of the National Bank. 

In 1990 the surviving clearing houses were legally merged to form a single Clearing House of Belgium. Now there is only one office left in Brussels. The cheques are exchanged manually, with the Clearing House acting as a sorting office. Representatives of the banks come to the Clearing House counters to hand over or collect envelopes containing cheques. The bank of the person drawing the cheque examines the cheque and gives the presenting bank and the Clearing House electronic confirmation that the cheque is valid. 

Since September 21, 2009, clearing of cheques has been carried out by the UCV; digital images are exchanged through SEDUS via the service provider Certipost. During the General Meeting on June 18, 2010, members of the Clearing House gave their assent to the definitive dissolution of the de facto organisation.

SEPA - The "Single Euro Payments Area" (SEPA) creates a single European market for payment instruments. The aim of SEPA is to enable payments to be made and received within Europe as efficiently and easily as if the transactions were being carried out within a single country. Therefore standards are being drawn up for the whole SEPA area for the three main payment instruments (credit transfers, direct debits and card payments). In addition, the same legislation applies to all the countries involved.

The Belgian market allows overdraft facilities on cash accounts held by non-resident investors.

Dividends are usually paid once a year, between April and July. They are credited on the investor's account on pay-date. The dividend payments are based on settled positions on record date.

Entitlement rules are outlined below, based on three key dates: 

• Ex-date
• Record date = ex-date +1
• Pay-date = ex-date +2

Annual

Annual

The payment date is announced in advance according to a predetermined calendar. Ex-date and pay-date are on the same day; distributions are based on settled positions as of close of business on ex-date minus one. 

Interest on OLOs, Traditional bonds, CDs, and commercial paper is paid through the NBB. Interest on OLOs, Traditional bonds, CDs and commercial paper, which are cleared through the NBB X/N clearing systems, is tax-exempt at source for non-resident investors provided a one-off certificate has been filed.

Actual/Actual Basis

N/A

The credit of rights is based on settled positions at record date.

Euroclear Belgium offers auto-compensation for a period of 20 business days as from Record Date.

The detection period for market claims is 20 business days as from Record Date on matched trades.

Foreign investors have unrestricted voting rights. Proxy voting rules are determined by law and the by-laws of the individual companies.

Share blocking has been abolished and replaced by record date.

Provided in English. Annual general meetings and extraordinary general meetings are announced at least 30 days prior in advance.

On request.

On request in French or Dutch, subject to availability

An increasing number of issuers are requiring the Power of Attorney from the beneficiaries. These allow them to make the link between the beneficiaries and the signatory of the proxy forms.

In July 2009, the Belgian regulator (FSMA opened a public consultation on the transposition in the Belgian legislation of the Directive 2007/36 on the exercise of certain rights of shareholders in listed companies. The new regulation has entered into force on January 1, 2012.

The Directive aims to improve shareholders' rights and to enhance corporate governance in European Union, as well as business competitiveness in general. 

The Directive introduces minimum standards to ensure that shareholders of companies whose shares are traded on a regulated market have a timely access to the relevant information ahead of the general meeting and simple means to vote at a distance. It also abolishes share blocking and introduces minimum standards for the rights to ask questions, put items on the GM agenda and table resolutions.

The Belgian transposition proposal focuses on the following items:

• notice period of 24 days which can be reduced to 17 days for second call with same agenda if the second call has been mentioned in the first convocation
• announcement via the Belgian Gazette, the press and the companies website
• the convocation must contain the agenda, the right for the shareholders to add items on the agenda under certain conditions, the procedure to vote by proxy and the possibilities of remote voting
• the abolition of the blocking date and the record date to become the standard rule
• the implementation for all listed companies of the registration date five calendar days before the meetings

Standard rate - 30%

Pension Funds - 0% (under strict conditions)

Investor types that are no longer eligible for exemption e.g. charities and universities:

In Belgium, a general 0% taxation rate does not exist. This implies that investors are in principle taxable with respect to their Belgian source income, unless they can benefit from a specific exemption provided for by Belgian domestic law. 

The foreign pension funds and Belgian pension funds are eligible for an exemption as regards the dividends paid by Belgian regulated real estate company (“Société immobilière réglementée”). 
The dividends paid by Belgian Regulated Real Estate Companies (Sociétés immobilières réglementées), which invest in care units and healthcare buildings - are subject to a withholding tax rate of 15 % as from January 1, 2017. 

Belgian Dividend Income

In principle, no withholding tax exemption exists with respect to Belgian dividends from ordinary shares. 

Formerly, in Belgium non-residents can benefit from a withholding tax exemption provided specific conditions are met (to be certified and justified)

• they may not have their residency, seat of wealth or management seat (registered office, head office, management or administration office) in Belgium;
• they have the (beneficial) ownership of the shares which are held in custody with a bank in Belgium;
• they do not carry out a business or conduct a profit-making activity;
• they are exempted from income taxes in the country of residence.

As of the 1^st of January 2013, the Belgian tax law has been amended and the exemption of withholding tax on dividend payments will only be granted to foreign Pension Funds. 

In addition to the previous conditions which remain in force, an additional condition is introduced in order to be entitled to the benefit of exemption: 
The non-resident entity shall have as unique and sole purpose the management and investment of funds collected for the constitution of legal and complementary pension schemes and shall therefore qualify as a Pension Fund.

For the dividends paid before the 1^st of January 2013, the previous regime is still applicable and the non-residents (which is not qualified as a Pension Fund) may still be eligible for the exemption of the full withholding tax.

With respect to income from Belgian investment companies (SICAV, SICAF and SIC), a withholding tax exemption is applicable if the investor qualifies as a non-resident (tax certificate required). The withholding tax exemption is not applicable to dividend income which the investment company itself derived from Belgian shares. In the latter event, the investment company will ventilate between the income which is subject to withholding tax and the income which is not. 

Non-resident investors are not taxed in Belgium on the income from foreign securities (bonds or shares) when the revenue is paid out in Belgium, provided those securities are held in custody with a Belgian bank, all paid to a financial institution abroad. Over-the-counter transactions are taxed at the rates mentioned above.

Qualifying foreign investors may benefit from a reduced withholding tax of 0% provided they meet the following criteria:

• The beneficiary has to be incorporated in a member state of the European Economic Area (EEA) or in a country that has signed a double taxation treaty (DTT) with Belgium that includes provisions for the exchange of information.
• The beneficiary must have a legal form or a similar form to the one foreseen by the EU parent / subsidiary Directive (2011/96/EU).
• The beneficiary has participation of less than 10%, but with a minimal value of EUR 2.5 million, in a Belgian company (note that foreign investors with participation above 10% in a Belgian company are already exempted from Belgian withholding tax as per European regulation).
• The beneficiary must hold its shares for an uninterrupted period of one year on the dividend payment date.
• The new Belgian withholding tax is not applicable to the extent that the foreign investor could obtain credit or reimbursement of the Belgian withholding tax in its own jurisdiction of residence.

The foreign investor certifies to the Belgian tax authority that all of the above conditions have been fulfilled in order to benefit from the reduced withholding tax.

Belgian Fixed Income instruments

Standard rate - 30%

Provided certain formalities are fulfilled, non-resident investors are exempt from Belgian withholding tax with respect to the following securities:

• dematerialised securities such as linear bonds, Treasury Certificates and commercial paper (tax certificate required).
• government and corporate bonds provided they are registered during the entire coupon period in the name of the beneficial owner (no bearer bonds) (tax certificate required).
• bank saving certificates provided they are registered during the entire coupon period in the name of the beneficial owner (tax certificate required).

Under domestic law no withholding tax applies to non-residents on interest income on qualifying registered corporate bonds and government bonds.

As a rule, there is no capital gains tax in Belgium for professional investors. However certain instruments  and other categories of investors are submitted to a capital gains tax. Those instruments are the zero-bonds, the capitalisation bonds and the sicavs with the European passport which are invested in more than 40% in fixed income products. Individual investors holding a position for less than six months are also submited to a capital gain tax, this is calculated by the Belgian financial intermiediary or has to be declared by the individual if it is managed through a foreign intermediary. Holdings for more than six months are exempted from the tax.

*awaiting ratification

Foreign investors are exempt.

Belgium Holiday Calendar

• EURONEXT euronext.com
• Ministry of Finance finance.belgium.be/en
• Financial Services and Markets Authority fsma.be/
• Clearnet SA. www.lch.com